How to Register a Business in the US from United Arab Emirates

Step 1: Benefits of starting your US business from United Arab Emirates

Starting a US business from the United Arab Emirates offers a myriad of advantages that can significantly benefit entrepreneurs. One of the primary benefits lies in the diverse and expansive market of the United States, which provides extensive opportunities for growth and scalability. By tapping into the world's largest consumer base, businesses can achieve higher revenue potential and gain international recognition. Additionally, the US market is known for its robust legal frameworks and business-friendly policies that facilitate innovation and competition, thereby enhancing the operational efficiency of new ventures.

Moreover, the UAE's strategic geographical location and its status as an international business hub serve as a strong foundation for launching a US-based business. With world-class infrastructure, advanced logistics, and superior connectivity, entrepreneurs can seamlessly manage both their UAE and US operations, ensuring smooth cross-border trade and communication. Furthermore, the UAE's favorable tax policies and numerous Free Trade Zones offer attractive incentives for businesses, thereby reducing operational costs and enhancing profitability. These factors combined make the prospect of starting a US business from the UAE not only viable but remarkably advantageous.

Step 2: How to start your US business from United Arab Emirates

Starting a US business from the United Arab Emirates can be a streamlined process if approached correctly. First, you need to decide on the type of business entity you want to establish, such as an LLC (Limited Liability Company), corporation, or partnership. For foreign entrepreneurs, an LLC is often the preferred choice due to its flexible structure and limited liability protection. The next step involves choosing a state in which to register your business; states like Delaware, Nevada, and Wyoming are popular due to their favorable business laws and tax structures. Once you have decided, you will need to appoint a registered agent in that state who can handle legal documents on behalf of your business.

Following this, you will need to file the necessary formation documents, such as the Articles of Organization for an LLC or Articles of Incorporation for a corporation, with the chosen state's Secretary of State office. Additionally, obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) is essential for tax purposes. This can be done online. Ensure compliance with all federal, state, and local regulations by applying for any required licenses and permits. Finally, consider opening a US-based bank account to facilitate financial transactions. Many banks have specific provisions that allow foreign nationals to open accounts, though this process may sometimes necessitate travel to the US for identity verification.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in United Arab Emirates

Understanding Compliance Requirements for Running a US Business in the United Arab Emirates

Expanding your business into the United Arab Emirates (UAE) offers exciting opportunities, but it's crucial to understand the compliance requirements to ensure smooth operations. Here are some key considerations:

1. Legal Structure and Local Sponsorship

Foreign investors must decide on a suitable legal structure. Common forms include:

• Limited Liability Company (LLC): Requires a local sponsor who owns 51% of the company.
• Free Zone Entity: Allows 100% foreign ownership but comes with specific restrictions on operations outside the free zone.

2. Licensing and Permits

The type of business license you need depends on the nature of your business.

1. Commercial License: For trading activities.
2. Industrial License: For manufacturing and production.
3. Professional License: For services, consulting, and craftsmanship.

Additionally, specific activities may require special permits from relevant government bodies.

3. Taxation

While the UAE is known for its tax-friendly environment, including no federal corporate tax, be aware of:

• VAT: Value Added Tax (VAT) at 5% on most goods and services.
• Withholding Taxes: Even though the UAE generally does not impose withholding taxes, companies dealing with international transactions should remain compliant with both local and US tax obligations.

4. Employment Regulations

Employment laws in the UAE differ significantly from those in the US. Key points include:

• Labor Contracts: Employment contracts must comply with the UAE Labor Law.
• Visa Requirements: Employees must have valid work visas and permits.
• End-of-Service Benefits: Employers are required to provide gratuity payments upon termination or resignation, based on the length of service.

5. Intellectual Property

It's important to protect your intellectual property (IP) in the UAE. Consider:

• Trademarks: Registering with the UAE Ministry of Economy.
• Patents: Filing for patents to safeguard innovations.
• Copyrights: Ensuring your creative works are protected.

6. Data Protection and Privacy

The UAE has specific regulations concerning data protection. Companies must:

• Ensure data privacy and protection laws are adhered to, especially for customer data.
• Comply with international standards if operating in regions with stringent data protection laws.

Understanding and adhering to these compliance requirements is crucial for the successful operation of your US business in the UAE. Ensure you seek local legal advice to navigate the complexities effectively.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in United Arab Emirates

Understanding Tax Obligations for Running a US Business in the United Arab Emirates

When considering the establishment or expansion of a US business in the United Arab Emirates (UAE), it is essential to understand the tax obligations that may arise. The UAE is known for its favorable tax environment, but there are several key factors that American business owners should be aware of. These considerations include corporate taxes, VAT, Double Taxation Agreements (DTA), and compliance requirements.

Corporate Income Tax

• General Overview: One of the most attractive aspects of the UAE for foreign businesses is the absence of federal corporate income tax. However, some individual Emirates may impose taxes on oil companies and branches of foreign banks.
• Branch Offices: A branch office of a US company in the UAE is generally not subject to corporate income tax, provided it does not engage in oil and gas activities.

Value Added Tax (VAT)

• VAT Implementation: The UAE introduced a VAT system on January 1, 2018. The standard VAT rate is 5%, which applies to most goods and services.
• Registration Threshold: Businesses with annual revenues exceeding AED 375,000 are required to register for VAT. Voluntary registration is possible for businesses with annual revenues below this threshold.
• Compliance: US businesses operating in the UAE must ensure compliance with VAT regulations, including proper invoicing, record-keeping, and timely filing of returns.

Double Taxation Agreements (DTA)

• Purpose: To avoid the risk of double taxation, the UAE has entered into numerous Double Taxation Agreements with various countries, including the United States.
• Benefits: These agreements can provide relief from double taxation and offer clarity on tax responsibilities for businesses operating cross-border.
• Application: US businesses should consult the relevant DTA to understand their specific tax obligations and how to benefit from the provisions of the agreement.

Compliance Requirements

• Regulatory Adherence: It is critical for US businesses in the UAE to adhere to local regulatory requirements, including maintaining up-to-date licenses and registrations.
• Financial Reporting: Proper financial reporting and record-keeping are necessary to comply with both local and international standards.
• Legal Advice: Consulting with local tax and legal experts can help ensure that all obligations are met and that the business operates within the legal framework of the UAE.

In conclusion, while the UAE offers a favorable tax environment for US businesses, understanding and navigating VAT, compliance requirements, and the benefits of Double Taxation Agreements are crucial tasks. Proper planning and expert guidance can help US businesses successfully manage their tax obligations in the UAE.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country